Proposed EU Scheme Would Auto-Generate Sustainability Labels From 2027

The European Commission on September 21, 2026 proposed a common Union rating scheme that will assign data centers with a capacity above 500 kW automatically generated labels disclosing their energy efficiency, water efficiency, clean energy sourcing, and contributions to the electricity grid.

The scheme is established by a delegated regulation supplementing the recast Energy Efficiency Directive and amending the Commission’s 2024 regulation that created the European database on data centres and its reporting scheme. It forms one part of a Data Centre Energy Efficiency Package announced the same day, alongside a report to the European Parliament and the Council assessing data reported by the sector and a call for evidence and public consultation on minimum performance standards for data centers operating in Europe. In its September 21, 2026 announcement, the Commission framed transparency as the starting point for sustainable growth, with Executive Vice-President Teresa Ribera stating: “Tripling our data centre capacity cannot mean tripling the pressure on our grids, our water and our energy bills.” Commissioner for Energy and Housing Dan Jørgensen said understanding the sector’s energy and resource consumption is the essential first step toward integrating data centers sustainably into the energy system.

How the Labels Will Work

Under the delegated regulation, the European database will automatically generate an electronic label by August 15, 2027 and every year thereafter for each data center that has communicated its information and key performance indicators. Each label is valid from August 15 of its issue year until August 15 of the following year and will be publicly available in electronic form in all official EU languages. Because the labels are built from indicators operators already report under the 2024 scheme, the Commission states the system creates no additional administrative burden. The database has been operational since September 2024, with reporting completed in 2024 and 2025.

The regulation’s annexes grade energy efficiency on an A-to-G scale by Power Usage Effectiveness (PUE), from class A at a PUE of 1.15 or less down to class G above 1.9, and grade water efficiency by Water Usage Effectiveness (WUE), from class A at 0.1 or less to class G above 1.0. Beyond the two grades, each label displays the data center’s name, operator, type, location, size category, reporting period and entry into operation; a QR code linking to its stored entry in the database; a breakdown of energy sourcing across on-site renewable and nuclear generation, power purchase agreements and guarantees of origin, plus non-specified sources; cooling degree days; whether the facility provides flexibility functions to the grid; whether it is “waste heat reuse ready”; and the share of its contracted clean energy that contributes new generation capacity.

Each label is accompanied by a Commission-prepared document contextualizing the indicators, including how PUE relates to local climate conditions and how WUE values relate to water stress levels in a specific location. According to the Commission’s questions-and-answers document, the scheme covers three dimensions of sustainability (power use efficiency, water use efficiency and the use of low-emission sources) alongside indicators for grid functions and waste heat reuse readiness. A data center counts as contributing new clean energy capacity when it holds power purchase agreements with renewable or nuclear plants that are no older than ten years or have been substantially refurbished within the past ten years. The Commission states the scheme is intended to increase transparency, allow comparison between data centers in the same region, and inform policymaking and the procurement of more sustainable digital assets and services.

Operators must make their label available electronically to any person requesting it, and they are prohibited from producing or displaying labels that mimic the official one. Participation is voluntary for operators of data centers with an installed information technology power demand below 500 kW and for data centers that have not yet entered operation, which may report the indicators they are designed or expected to achieve after two calendar years of operation. Data centers serving exclusively the defence and civil protection of a Member State are exempt from reporting.

Scrutiny, Review and Related Consultations

The delegated regulation is now subject to a two-month scrutiny period by the European Parliament and the Council, which may object to the act but cannot propose changes to its text. It enters into force on the twentieth day after its publication in the Official Journal of the European Union, and the Commission expects the first sustainability labels for individual data centers to be displayed in 2027. By December 31, 2028 and every three years thereafter, the Commission will assess the regulation and report to the Parliament and Council, with possible revisions including an aggregated sustainability rating for each data center and certification or auditing of reported data.

The parallel consultation on minimum performance standards closes on December 14, 2026, with the final proposal planned for the second quarter of 2027 and a supporting study that began in early 2026 and runs for 24 months. The questions-and-answers document states that common minimum standards are intended to reduce regulatory fragmentation between Member States and to prevent divergent national approaches from weakening the operating environment for data center operators. The Commission is also following up on a declaration of intent signed in June 2026, working with data center operators, grid operators, energy providers and public authorities toward a tripartite agreement on data centers in the second half of the year.

Documented Energy Demand and Preparation

Data centers in the EU consumed 68 TWh of electricity in 2024, and the regulation’s explanatory memorandum projects this will rise to 114 TWh by 2030, reaching 3.2% of Union electricity demand, with the accelerated adoption of artificial intelligence identified as one of the main growth drivers. Globally, data centers account for about 1.5%, or 415 TWh, of yearly electricity consumption, and projections from the International Energy Agency cited on the Commission’s energy performance of data centres page indicate consumption will more than double to 945 TWh by 2030; the same page states the EU’s aim to triple its data centre capacity by 2035.

The explanatory memorandum states that improving a data center’s PUE from 1.6 to 1.2 can reduce its electricity consumption by 25%, that improving WUE from 1.0 to 0.5 can reduce water consumption by 50%, and that reusing half of all waste heat from European data centers can cover the total heating demand of almost 4 million households in Europe.

Preparation of the rating scheme ran through 2025 and into 2026, comprising a technical assistance study from January to November 2025, four stakeholder workshops averaging around 150 participants each, two online surveys receiving 105 and 145 replies, 14 targeted interviews, and a public feedback period from March 26 to April 23, 2026. The Commission published an analysis of the data submitted in the first reporting period in July 2025.